Boustany: We haven’t discussed extenders yet — Report: Billions available if states close ‘water’s edge loophole.’

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BOUSTANY: WE HAVEN’T DISCUSSED EXTENDERS YET. Ways and Means Republican Charles Boustany said the panel hasn’t yet had a serious conversation about renewing the series of expired tax breaks known casually as extenders. There is a growing frustration among the business community that Congress allowed the extenders to expire on Dec. 31 with little more than a passing mention. Industries that rely on the research and development credit or the various energy-focused provisions know, of course, that tax-writers can enact the policies retroactively, so the concern is largely based on Congress’ inability to handle things in normal order and a focus from Ways and Means and Senate Finance on inking a tax reform deal.

Boustany said the panel’s attention is still on reform but committee members will likely discuss extenders after House Republicans return from their weekend retreat in Maryland. “As a committee we have not yet had a discussion on extenders,” the Louisianan said. “All of our efforts have been on a tax reform package. We’ll go into the retreat and we’ll see what comes out of that. At some point we’re going to have to start thinking if we’re going to look at the extenders or not.”

FIRST LOOK — REPORT: BILLIONS AVAILABLE IF STATES CLOSE ‘WATER’S EDGE LOOPHOLE.’ California, New York, Texas, Illinois and Massachusetts could each see millions in additional tax revenues if they were to close the so-called “water’s edge loophole” that gives companies a pass on reporting income likely generated within the states’ borders but shifted to overseas subsidiaries, a forthcoming report from the liberal-leaning U.S. Public Interest Research Group has found. The research shared early with Morning Tax — look for it around 9 a.m. — says nearly two dozen states would see a budget boost if the tax law was altered as offshore tax haven use cost states $20.7 billion in 2012 with the states above being the top contenders for additional revenue. “Not only is the practice of exploiting tax havens unfair, but it strains federal and state budgets,” reads the report.

TAX SEASON OPENS TOMORROW. We’ve arrived at the start of the 2014 tax season — a season likely to be defined by Obamacare and the influx of same-sex couples filing their first joint tax returns. How do you predict the filing season will go? What problems are you on the lookout for? Let Morning Tax know and we’ll feature the smartest answers in tomorrow’s edition.

HAPPY THURSDAY! By now everyone has seen the Budweiser Super Bowl ad with the adorable puppy and everyone’s favorite Clydesdale — and if you haven’t, you should. Morning Tax is predicting a game-day hit with this one (cause who watches for the football, anyways?). Want to talk taxes? Send tax gossip, tips or scoops at lfrench@politico.com or @LaurenNFrench. As always, please follow @POLITICOPro and @Morning_Tax.

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HOUSE: On recess as House Republicans are heading to Maryland for their annual retreat.

SENATE: Convenes at 10 a.m.

THE WORRIES OF THE RICH. POLITICO’s Ben White reports, “Economists, advisers to the wealthy and the wealthy themselves describe a deep-seated anxiety that the national — and even global — mood is turning against the super-rich in ways that ultimately could prove dangerous and hard to control. President Barack Obama and the Democrats have pivoted to income inequality ahead of the midterm elections. Pope Francis has strongly warned against the dangers of wealth concentration. And all of this follows the rise of the Occupy movement in 2011 and a bout of bank-bashing populism in the tea party. The collective result, according to one member of the 1 percent, is a fear that the rich are in deep, deep trouble. Maybe not today, but soon.” http://politi.co/1iOxHQm

PUT IT ON YOUR CALENDARS: KOSKINEN’S FIRST GO-AROUND. The Ways and Means Committee will have its first chance to publicly question John Koskinen next week when the IRS commissioner sits before the committee to answer questions on the ongoing investigation into tea party targeting, proposed regulations for 501(c)4 groups, the backlog of nonprofit applications for tax-exempt status, the Affordable Care Act and improper payments for tax credits, likely the Earned Income Tax Credit. Koskinen is well-liked among both Republicans and Democrats but that good reputation is unlikely to spare the newly-minted commissioner from tough questions on how he is ensuring a bias-free agency when it comes to nonprofit applications and the health care act. The hearing is Feb.5 at 9 a.m.

THE MAKEOVER OF PAUL RYAN. Jake Sherman reports, “[Paul]Ryan is sifting through the lessons of his political past to shape a new persona. The 15-year House veteran seems resolute about a mission with an uncertain ending. The Wisconsin Republican is, in part, betting that incrementalism — legislative half-steps toward conservative solutions — is the best look for Republicans in a divided Washington. The recent budget agreement is a perfect example. The Ryan who wanted to remake America is now trying on modesty…The brand Ryan is cultivating is deliberate, serious and aims to be inclusive of other political parties and voters who haven’t considered Republicans. While other high-profile Republicans seem to hold at arm’s length the Washington in which they serve — namely Sens. Cruz of Texas and Rand Paul of Kentucky — Ryan seems to be relishing the rough and tumble.” http://politi.co/1gtazXt

TO INFINITY AND BEYOND…FOR TAX BREAKS. Any would-be rocket mans will find a cheaper life in California if a proposal moving through the state’s assembly is signed into the law. The measure would give for-profit space explorers headquartered in the state a pass on property taxes for rockets and space stations — a move to boost California’s aerospace industry, Reuters reports. More: http://bit.ly/1mZWXjU

WHAT PROS ARE READING: Your Morning Tax-er and Kelsey Snell dig into how theproposal from President Obama to boost tax credits for the working poor faces a difficult path through familiar political battlegrounds, including some ambivalence about the credit among Republicans. http://politico.pro/1hNIg2y. Our Brian Faler also reports on the EITC, discussing how Republicans view the error rates and fraud issues associated with the credit as a bad omen for the refundable credits included in Obamacare. http://politico.pro/1fef8Q9

QUICK LINKS:

-- The ability for Bitcoin holders to more readily mask illegal activity with the digital currency means the community needs tougher regulations than traditional financial institutions, a series of law enforcement officials are arguing. More from Bloomberg: http://bloom.bg/LpamGB

DID YOU KNOW? Louis Vuitton created a teddy bear that cost $2.1 million.

EXCLUSIVE TO PROS LATER TODAY: POLITICO Pro will publish a special report on President Barack Obama’s executive power maneuvers, with a dozen stories looking at virtually every area of regulation, rule-making and executive action coming from the administration. The special report will dive into the president’s State of the Union promises and will reveal a much deeper regulatory and executive power agenda for the final years of Obama’s term. Look out for an email later this evening, customized to your policy interests.

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